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PFC Board Grants In-Principle Approval for Merger with REC Limited
The Board of Power Finance Corporation (PFC) has approved an in-principle proposal to merge with its subsidiary, REC Limited. This move follows the Union Budget 2026-27 announcement aimed at restructuring public sector NBFCs to achieve greater scale and operational efficiency. PFC currently holds a 52.63% stake in REC, and the merged entity will continue to be classified as a Government Company. A detailed merger scheme is currently being finalized and will be subject to further regulatory approvals.
Key Highlights
Board grants in-principle approval for the merger of PFC and REC Limited.
Restructuring follows the Union Budget 2026-27 vision for Public Sector NBFCs.
PFC currently holds 52.63% of the Government's holding in REC.
The consolidated entity will remain a 'Government Company' under the Companies Act, 2013.
Detailed merger scheme and swap ratios are yet to be finalized and disclosed.
💼 Action for Investors
Investors should view this consolidation positively as it is likely to create a massive power-sector lending powerhouse with improved capital efficiency. Monitor for the announcement of the swap ratio and the timeline for regulatory clearances.
PFC Board Grants In-Principle Approval for Merger with REC Limited
The Board of Power Finance Corporation (PFC) has provided in-principle approval for a merger with its subsidiary, REC Limited, following a directive in the Union Budget 2026-27. PFC currently holds a 52.63% stake in REC, and the consolidation aims to enhance scale and operational efficiency among public sector NBFCs. The merged entity will continue to be classified as a Government Company. A detailed merger scheme is currently being finalized and will be subject to further regulatory and statutory approvals.
Key Highlights
In-principle approval granted for the merger of PFC and REC Limited to create a larger lending entity.
Restructuring follows the Union Budget 2026-27 proposal (Para 43) for public sector NBFC efficiency.
PFC currently owns a 52.63% controlling stake in REC Limited.
The combined entity will remain a Government Company under the Companies Act, 2013.
Detailed merger scheme and share exchange ratios are yet to be finalized and disclosed.
💼 Action for Investors
Investors should view this consolidation positively as it will likely reduce borrowing costs and eliminate operational overlaps. Monitor for the announcement of the swap ratio and the timeline for final regulatory approvals.
PFC Board Grants In-Principle Approval for Merger with REC Limited
The Board of Power Finance Corporation (PFC) has granted in-principle approval for a merger with its subsidiary, REC Limited, following a proposal in the Union Budget 2026-27. This restructuring aims to achieve greater scale and improve operational efficiency within public sector NBFCs. PFC currently holds a 52.63% stake in REC, and the merged entity will continue to be classified as a Government Company. A detailed merger scheme is currently being finalized and will be subject to further regulatory and shareholder approvals.
Key Highlights
PFC Board approved the in-principle merger with REC Limited to enhance scale and efficiency.
The move follows the Union Budget 2026-27 announcement regarding the restructuring of Public Sector NBFCs.
PFC currently maintains a 52.63% controlling interest in REC Limited.
The combined entity will remain a 'Government Company' under the Companies Act, 2013.
A detailed merger scheme and swap ratios are yet to be finalized and disclosed.
💼 Action for Investors
Investors should view this as a positive long-term consolidation that could lead to better capital efficiency and lower borrowing costs. Monitor for the announcement of the share exchange ratio to assess the immediate valuation impact on both stocks.
PFC Q3 FY26 PAT Rises 15% to ₹4,763 Cr; Declares ₹3.50 Interim Dividend
Power Finance Corporation (PFC) reported a robust performance for Q3 FY26, with standalone net profit increasing 14.6% YoY to ₹4,763.33 crore. Total revenue from operations grew to ₹14,655.84 crore, primarily driven by a 12% rise in interest income. The company declared its third interim dividend of ₹3.50 per share for FY26, with a record date of February 20, 2026. Asset quality remains healthy with a high provision coverage ratio of 84.23% on Stage 3 assets and a total loan book of ₹5.69 lakh crore.
Key Highlights
Standalone Net Profit grew 14.6% YoY to ₹4,763.33 crore for the quarter ended December 31, 2025.
Declared a third interim dividend of ₹3.50 per share, bringing the total FY26 dividend to ₹10.85 so far.
Total Revenue from Operations reached ₹14,655.84 crore, up from ₹13,043.69 crore in the same quarter last year.
Loan assets (principal outstanding) stood at ₹5,69,626.94 crore with a Stage 3 provision coverage of 84.23%.
Interest income for the nine-month period ended December 2025 rose to ₹41,147.54 crore.
💼 Action for Investors
Investors should maintain a positive outlook given the steady growth in interest income and consistent dividend payouts. The stock remains an attractive pick for those seeking a combination of stable earnings growth and high dividend yields.
PFC Q3 PAT Rises 14.6% YoY to ₹4,763 Crore; Declares Third Interim Dividend
Power Finance Corporation (PFC) reported a robust performance for Q3 FY2025-26, with standalone Net Profit (PAT) growing 14.6% YoY to ₹4,763.33 crore. Revenue from operations increased by 12.3% YoY to ₹14,655.84 crore, primarily supported by a steady rise in interest income. Asset quality continues to trend positively, with Stage 3 assets (GNPA) reducing to 1.64% compared to 1.94% in March 2025. The Board also declared a third interim dividend for the financial year, maintaining its commitment to shareholder returns.
Key Highlights
Net Profit (PAT) increased 14.6% YoY to ₹4,763.33 crore in Q3 FY26.
Total Revenue from Operations grew 12.3% YoY to ₹14,655.84 crore.
Stage 3 (GNPA) assets improved to 1.64% of total loans from 1.94% in March 2025.
Provision Coverage Ratio (PCR) for Stage 3 assets remains high at 84.23%.
Total loan book (principal outstanding) reached ₹5,69,627 crore as of December 31, 2025.
💼 Action for Investors
PFC continues to demonstrate strong earnings growth and improving asset quality, making it a solid pick for value and dividend-seeking investors. The consistent reduction in bad loans and high provision coverage provide a comfortable margin of safety.
PFC Q3 Net Profit Rises 15% YoY to ₹4,763 Cr; Declares ₹3.50 Interim Dividend
Power Finance Corporation (PFC) reported a strong performance for Q3 FY26, with standalone net profit growing 14.6% YoY to ₹4,763.33 crore. Total revenue from operations increased by 12.4% YoY to ₹14,655.84 crore, primarily driven by a rise in interest income. The company declared a third interim dividend of ₹3.50 per share, bringing the total interim dividend for FY26 to ₹10.85 so far. Asset quality continues to improve, with Stage 3 (NPA) loans decreasing to ₹9,348 crore from ₹10,517 crore in March 2025.
Key Highlights
Net Profit for Q3 FY26 stood at ₹4,763.33 crore, up from ₹4,154.92 crore in Q3 FY25.
Declared third interim dividend of ₹3.50 per share (35%) for FY 2025-26.
Total loan outstanding reached ₹5,69,626.94 crore as of December 31, 2025.
Stage 3 provision coverage ratio remains robust at 84.23% with absolute Stage 3 assets declining.
Interest income grew 12.2% YoY to ₹13,935.87 crore during the quarter.
💼 Action for Investors
PFC continues to demonstrate stable earnings growth and attractive dividend payouts, making it a strong candidate for income-seeking investors. The consistent improvement in asset quality and loan book expansion supports a positive long-term outlook.
PFC to Deliberate on Govt Proposal to Restructure and Merge with REC
Power Finance Corporation (PFC) has clarified that the Union Budget 2026 proposed a restructuring of PFC and REC to enhance efficiency in public sector NBFCs. This follows PFC's 2019 acquisition of a 52.63% stake in REC, which made REC its subsidiary. The company is now scheduling a Board Meeting to discuss the government's vision and determine the next steps for a potential merger. Investors should note that this structural change aims to create a larger, more efficient credit disbursement entity for the power sector.
Key Highlights
Union Budget 2026 proposes restructuring PFC and REC for better scale and efficiency.
PFC currently owns a 52.63% stake in REC following a March 2019 acquisition.
Board Meeting to be convened soon to deliberate on the government's restructuring directive.
Proposal is part of the 'Viksit Bharat' vision for NBFC credit disbursement targets.
💼 Action for Investors
Maintain a watch on PFC and REC stocks as the merger could lead to significant valuation re-rating or synergy benefits. Wait for official board approval and swap ratio details before making major portfolio adjustments.
PFC to Raise Up to ₹5,000 Crore via Public Issue of Secured NCDs
Power Finance Corporation (PFC) has announced a public issue of secured, non-convertible debentures (NCDs) with a base size of ₹500 crore and an option to retain oversubscription up to ₹4,500 crore. The total Tranche I issue limit is ₹5,000 crore, which is part of a larger ₹10,000 crore shelf limit. The NCDs offer tenors of 5, 10, and 15 years with coupon rates ranging from 6.85% to 7.30% per annum depending on the investor category. The issue is scheduled to open on January 16, 2026, and close on January 30, 2026.
Key Highlights
Total Tranche I issue size of ₹5,000 crore, including a ₹4,500 crore green shoe option.
Coupon rates range from 6.85% to 7.30% p.a. across 5, 10, and 15-year tenors.
Includes Series III Zero Coupon NCDs with a face value of ₹1,00,000.
NCDs are secured by a first pari-passu charge on book debts with 100% security cover.
Subscription period is set from January 16, 2026, to January 30, 2026.
💼 Action for Investors
Fixed-income investors should consider these NCDs for stable yields backed by a leading PSU, while equity investors should view this as a routine fundraise to support lending growth.